Which of the following will result as part of the interest rate effect when the price level rises?
a. Households and firms increase their holdings of money
b. Interest rates will increase.
c. A lower quantity of real GDP will be demanded.
d. All of the above will result as part of the interest rate effect when the price level rises.
d
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In calculating the current yield for a bond the:
A. present value of the capital gain/loss is ignored. B. coupon payment and purchase price is all that is needed. C. present value of the coupon payments is the only important consideration. D. present value of the final payment is the only important consideration.
The long-run supply curve under pure competition will be:
A. Downward-sloping in a decreasing-cost industry and upward-sloping in an increasing-cost industry B. Horizontal in a constant-cost industry and downward-sloping in an increasing-cost industry C. Vertical in a constant-cost industry and upward-sloping in a decreasing-cost industry D. Upward-sloping in an increasing-cost industry and vertical in a constant-cost industry
Which of the following increases the equilibrium price of a used car and decreases the equilibrium quantity?
A) an announcement by the U.S. Attorney General that the windows on older cars were made with cheaper glass that can explode at high speeds B) new federal legislation that raises the legal driving age to twenty-four in all states C) a new fee that used car dealers must pay to the government on all sales of used cars D) all of the above because each is consistent with the "law of demand"
The terms rational expectations and adaptive expectations are two different names for the same concept
Indicate whether the statement is true or false